The developer of Long Creek Crossing on the southeast corner of Collins & I-80 has had a hard time figuring out what to put on the final lot between Chik-fil-A and Starbucks. The lot size (1.225) was too small for many businesses that looked at the space (like a salad shop that looked at the lot): too small means it’s harder to fit customers in the building and thus harder to generate enough sales to break even. Originally, that lot was designed to be a gas station and convenience store, but residents in the nearby Stone Canyon neighborhood vocally protested having a gas station on that corner years ago.
The whole development has had an identity crisis from the start, when it was first approved as a Master Planned Development (MPD) in October 2017. A hotel on the site was considered at one point. A Taco Bell proposal was also rejected due to perceptions that it’s low quality (Taco Bell is still one of the cheapest fast food chains). It seems like both the Town of Sunnyvale and the Developer didn’t expect this project to drag on for almost 8 years.
Finally a limited partnership company that appears to be a shell owned by the developer (Sunnyvale US 80 & Collins LP) filed a lawsuit against the Town of Sunnyvale, the 4B board members, and the Town Council members individually, for $1 Million dollars. The lawsuit claims the town took too long to provide comments about the site proposal and that the town didn’t technically give their comments disapproving of the drive-thru plans as an official response, but most importantly: the Approved Concept Plan for Long Creek Crossing envisioned 5 restaurant locations, with only 2 of those being drive-thru locations. However, the plan also said that a drive-thru could be placed on any of the lots.
So…the intent of the approved plan by the Town seems clearly to have been to have 5 restaurants, only 2 of them drive-thrus, but the Town was agnostic as to which lots were selected as drive-thrus. The developer seems to be latching on to a very narrow reading of the plan and saying that because they can put a drive-thru anywhere, that means they can put drive-thrus everywhere.
I can understand that developers are under pressure to complete projects, especially ones that are now facing higher interest rates to carry and prices that are starting to cool off, but this seems like a frivolous lawsuit that would intimidate me if I were a small-town Council member. However, I am not a lawyer, and if any Sunnyvale readers are also lawyers and want to explain this to me, I’d love to hear your opinion on the lawsuit and whether an argument like this actually holds up (I would have called a lawyer about this already, but I’m afraid of getting a bill for legal advice after the call).
To resolve the situation, the developer has found a willing party to try their luck, in the form of a private equity-backed steakburger (not hamburger) chain called Freddy’s. Freddy’s is a restaurant company from Wichita, Kansas that sold out to a private-equity firm in 2021. These types of deals often focus on extremely fast growth fueled by high financial leverage, and very aggressive cost-cutting to boost short-term performance. Freddy’s probably needs new franchise locations like this one just as badly as Long Creek Crossing’s developer needs someone to take their final lot.
However, Freddy’s is probably a higher quality restaurant than Taco Bell. It’s competing directly with the Chik-fil-A, Burger King, and Whataburger spots nearby, as well as the Wendy’s, McDonald’s, and Arby’s on the Belt Line Rd exit. Lone Star Custard, the Freddy’s franchise operator, has opened 44 locations in Texas since 2022, and had none before that. Their only 3 years of experience means they’ve never operated these restaurants through an extended economic cycle or product cycle, which gives me concern, but I hope Freddy’s is wildly successful here in Sunnyvale and raises the bar for the many meat-in-bun venues we have, since I have heard complaints about many of the ones we currently have.
3 town council members noted they visited Freddy’s restaurants and that the quality seemed very good, the restaurants looked attractive for families, and the food was sufficiently different from what’s offered at the nearby burger joints. Council member Danny voted against the approval, on the basis that fast food like steak-burgers and frozen custard is unhealthy. The final vote was 5 for and 1 against, with (former?) Council Member Mark Eldridge absent once again.
As part of the discussion before the Town Council voted, the traffic impact was also discussed extensively. There was a traffic study done about the number of cars at this intersection, and it was updated recently. As Sunnyvale residents might have guessed, there is already a lot of traffic. It was also noted that the Chik-fil-A is doing a brisk business and beating projections, and this new restaurant will likely bring even more traffic to the intersection. The Town is currently working with TX Dept of Transportation to get ownership of the street at I-80 and Collins, because without that the Town won’t be able to put another traffic light at this development. It’s not clear when that would happen, but Town Manager Jeff Jones stated that these conversations have been underway for some time already.
Hopefully this vote means that the lawsuit against our Town will finally be dropped—a lawyer from Jackson Walker LLP was with the franchise owner for the Town Council meeting, and Jackson Walker is also representing the developer in their pending lawsuit. I’ll be reaching out to Jackson Walker on their client’s intentions going forward; if I get a response I will share it here.
Ben, unclear to me what street the town is trying to get ownership of and where the traffic light would be placed?